Top 100 special REPORT Gareth JJ Burgess JJ Gareth

30 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

Our Top 100 ranking of aerospace manufacturers’ 2011 financial performance reveals the beginning of a sharp divergence in fortunes between companies supplying civil programmes and those reliant on military sales

DAN THISDELL loNDON the defence side, and programmes such as the However, the most dramatic response to Boeing 787 and 737, or Airbus A320 and – the defence squeeze has been, and will con- or a quick summary of the aerospace soon – A350 are starting to drive revenue tinue to be, attempts to shift into cyber secu- industry financial situation today, growth along their supply chains. But for rity, typically by acquisition. For military sup- think three words: civil versus de- those heavily reliant on defence, the response pliers, the strategy is attractive because that fence. The 2011 financial data ana- to this market schizophrenia is going to be the sector shares many defence technologies and, F lysed by PwC to compile our latest Top 100 defining story of the aerospace industry for critically, government customers. report on the following pages highlights the the next several years. But PwC’s head of aerospace and defence beginning of the end of the post-9/11 military PwC strategy director Anna Sargeant, who Neil Hampson advises caution; the cyber in- spending surge, but the economic impact on leads the Top 100 analysis team, says the in- dustry culture resembles Silicon Valley more defence-focused companies will not really hit dustry needs to recognise that the current than it does the bureaucratic, process-driven hard until 2013. round of military spending cuts is not a cycli- defence industry. Management will have to Indeed, next year threatens to open with cal budget squeeze that will be reversed in be particularly skilful to beat odds which, he US military spending – the motor behind time. Governments, she says, are changing warns, are stacked against success. much industry growth – dropping off a so- their attitudes to risk and may not return to So perhaps more than at any time in the called “fiscal cliff” of automatic cuts set for 1 the market with deep pockets: “The wave is past decade, management quality matters. January. Between now and then it would take not really there to be ridden any more.” After all, while the defence market is chang- an extraordinary outbreak of bipartisan col- Meanwhile, with new large programmes in ing dramatically, the civil market cannot laboration to resolve this budget impasse, and the pipeline mergers and acquisitions are the maintain its growth trajectory forever. If we even November’s elections may fail to break only route to significant civil business. Like- have learned anything from the past several Washington’s political deadlock. wise on the defence side, at least for systems years, it is that all business is cyclical. ■ At companies where business is balanced integrators; companies with niche specialities To view our full list of the Top 100 aerospace between civil and defence, rising civil sales may still enjoy organic growth and could end companies, including revenue and profit fig- are typically more than offsetting declines on up as acquisition targets. ures, visit flightglobal.com/top100

flightglobal.com 18-24 September 2012 | Flight International | 31 Top 100 special REPORT BillyPix Boeing’s 787 is finally coming in with the revenue

BOEING EADS LOCKHEED MARTIN Revenue: $68.7 billion Revenue: $65.1 billion Revenue: $46.5 billion Profit: $5.84 billion Profit: $2.14 billion Profit: $3.98 billion Seattle is back at the top for a second Military sales lag behind Boeing, but Aeronautics sales grew nearly 10% in year after being briefly overtaken by EADS’s Airbus division rules, with $41.3 2011, but other units lagged and US European nemesis EADS billion revenue eclipsing its US rival defence spending cuts were yet to hit

+1 GENERAL DYNAMICS UNITED TECHNOLOGIES Revenue: $32.7 billion Revenue: $26.9 billion Profit: $3.83 billion Profit: $3.92 billion Sales grew in 2011 – barely – but aero- The Pratt & Whitney, Sikorsky and Hamilton Sundstrand parent will get a boost in next space led other divisions as Gulfstream year’s Top 100 from its $18.4 billion acquisition of Goodrich (ranked 18th) and its $8.1 shone in a weak business jet market billion revenue, but divestments, including the sale of P&W Rocketdyne, mean UTC may fail to displace General Dynamics to move up to fourth -1 NORTHROP GRUMMAN Revenue: $26.4 billion Profit: $3.28 billion Sales lost 6% from 2010 levels as all divisions went backwards. Shipbuilding business was divested in 2011

RAYTHEON Revenue: $24.9 billion Profit: $2.86 billion Sales dipped for the missiles and defence electronics maker; intelligence Seahawk flies the systems were a bright spot Sikorsky flag Sikorsky

32 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

+1 +1 +3 FINMECCANICA GENERAL ELECTRIC SAFRAN Revenue: $19.7 billion Revenue: $18.9 billion Revenue: $13.9 billion Loss: $2.22 billion Profit: $3.51 billion Profit: $1.57 billion A third-quarter charge of €753 million Aviation is now a standalone reporting Engines are a Safran strong suit, particu- ($998 million) characterised a miserable segment, which in 2011 accounted for a larly through its CFM partnership with 2011 for the Italian industrial champion fifth of industrial revenues at GE GE, and security is a growth area

+1 THALES Revenue: $13.1 billion Touchscreen Profit: not available cockpit, Thales Profitability has been an issue at Thales, concept but a push to better co-ordinate sales and engineering may cut costs and help keep projects on track. The Paris-headquartered company is driving hard to be a technology leader, too, with a creative array of inte- grated cockpit, navigation and in-flight enter- tainment concepts. Talk of a merger or alli- ance with Safran led to speculation that the French government would initiate an industry shake-up in 2011, but all went quiet. Thales and Safran could, however, swap some assets to give each group a tighter focus Thales

+2 -7 ROLLS-ROYCE BAE SYSTEMS Revenue: $12.1 billion Revenue: $8.92 billion Profit: $1.51 billion Profit: not available Rolls-Royce ranks behind engine leaders BAE drops down the rankings owing to improved analysis eliminating marine and cyber GE and United Technologies (Pratt & sales. Heavy US military market exposure will make for an interesting 2012 Whitney), but outgrew both in 2011

-2 L-3 Revenue: $11.9 billion Profit: $1.36 billion Sales edged down in 2011, but C3 and ISR showed some growth. Government services no longer figure in the Top 100

+1 HONEYWELL Revenue: $11.5 billion Profit: $2.02 billion Growth of 7% highlights strength in diver- sity – OEM and aftermarket products BAE is a key Lockheed range from engines to avionics Martin F-35 partner ockheed MartinL ockheed flightglobal.com 18-24 September 2012 | Flight International | 33 Top 100 special REPORT

BOMBARDIER TEXTRON Revenue: $8.59 billion Revenue: $8.39 billion Profit: $502 million Profit: $722 million 2011 results are 11 months only, but The maker of Bell helicopters and Cessna business aircraft saw sales and profits rise both regional and business jet units are despite continued difficulty for Bell’s civil rotorcraft product line. Cessna posted very working under severe market pressure strong growth at nearly 17%, however, after plunging 23% in 2010

+3 NEW TO TOP 20 EMBRAER Revenue: $5.80 billion Profit: $318 million Steady progress marks Brazil’s cham- pion as commercial and defence growth offsets flat sales in business aviation

+1 NEW TO TOP 20 MITSUBISHI HEAVY INDUSTRIES Revenue: $5.65 billion Loss: $124 million Sales grew 12% in 2011, a performance that should continue as Boeing relies on Citation X: plenty of MHI for production of 787 wings sales thrust for Cessna Cessna

GOODRICH Revenue: $8.08 billion Profit: $1.34 billion The maker of systems ranging from landing gear and air-conditioning to nacelles will disappear from next year’s Top 100 owing to its acquisition by United Technologies. At $18 billion-plus, that deal, which closed this summer, is the industry’s biggest ever

787’s Trent 1000s work in Goodrich nacelles Rolls-Royce

34 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

TOP 100 REVENUE AND PROFIT GROWTH OF THE AEROSPACE TOP 100 2005-2010 As the chart to the right clearly shows, Top 100 profit growth settled down to nearly zero last year after the financial crisis shock of 2009 and its 30% dramatic near-reversal in 2010. Low single-digit Sales Pro t World GDP sales growth is a far cry from the pre-crisis boom 20% years, or even crisis-struck 2008, which only re- ally turned bad in the fourth quarter. But these 10% figures only tell part of the story – and it remains to be seen if a full picture would show more of the same or tell a different tale. What is missing 0 are the contributions of the growing aerospace industries in China and Russia, where anecdotal -10% evidence suggests a significant contribution to global growth. Sadly, though, company reporting in these countries is not (yet?) sufficiently trans- -20% 2005 2006 2007 2008 2009 2010 2011 parent to be included in this analysis. SOURCE: PwC EADS A400M assembly at Airbus Military

Top 20 by operating margin 2011* Top 20 by sales growth (%)

Rank by Rank by Company Operating Rank by Rank by Sales margin sales margin Growth % sales growth (%) 1 55 TransDigm Group 40.4% 1 55 TransDigm 45.7% 2 23 Precision Castparts 25.2% 2 86 LISI 44.8% 3 35 Hindustan Aeronautics 21.7% 3 51 ATI 44.1% 4 96 Martin-Baker 20.6% 4 63 Diehl Aerosystems 30.3% 5 83 FLIR Systems 20.3% 5 27 Zodiac 28.0% 6 94 Garmin 20.1% 6 78 Aernnova 26.6% 7 70 Amphenol 19.1% 7 43 Meggitt 25.2% 8 72 Heico 18.1% 8 23 Precision Castparts 24.8% 9 43 Meggitt 18.0% 9 58 Chemring 24.8% 10 22 Rockwell Collins 17.6% 10 72 Heico 24.0% 11 39 B/E Aerospace 17.5% 11 39 B/E Aerospace 23.5% 12 60 Ultra Electronics 16.7% 12 61 Hexcel 18.6% 13 47 CAE 16.6% 13 45 Teledyne Technologies 18.1% 14 18 Goodrich 16.5% 14 31 Alcoa 17.9% 15 25 Harris 16.4% 15 77 Crane 17.4% 16 30 Triumph Group 15.1% 16 30 Triumph Group 17.3% 17 14 Honeywell International 14.7% 17 79 Firth Rixson 16.9% 18 79 Firth Rixson 14.6% 18 21 Spirit AeroSystems 16.6% 19 87 SKF 14.5% 19 44 BBA Group 16.6% 20 58 Chemring 14.4% 20 80 Curtiss-Wright 16.3% NOTE: *Where possible, margin is for aerospace operations only. SOURCE: PwC SOURCE: PwC flightglobal.com 18-24 September 2012 | Flight International | 35 Top 100 special REPORT

+4 +5 SPIRIT PRECISION CASTPARTS AEROSYSTEMS Revenue: $4.46 billion Revenue: $4.86 billion Profit: not available Profit: $514 million For Portland, Oregon-headquartered Precision, acquisitions – including the August 2011 Adding $692 million equalled 17% sales purchase of aerostructures and components maker Primus International – are part of a growth and prospects are strong, with growth strategy that looks to buy-in capabilities to enhance its core offering of complex major positions on A350 and 737 component manufacture

+2 ROCKWELL COLLINS Revenue: $4.81 billion Profit: $846 million Strength in communications systems mean retrofit prospects and a good shot at riding out US military spending cuts

-4 DASSAULT AVIATION Revenue: $4.39 billion Profit: $498 million Military sales plunged with a 2011 lull in Precision’s 777 pres- deliveries to France, but an India deal for ence includes engine Rafale fighters looks like gold structural castings Dan Thisdell/Flightglobal Dan

+8 -2 ZODIAC HARRIS Revenue: $3.62 billion Revenue: $4.07 billion Profit: $510 million Profit: not available At 28%, the Paris-based maker of seats, galleys and electrical equipment ranks fifth by Secure communications systems, sales growth and carries that momentum into 2012; 787 is a sales generator including air traffic control

+1 MTU AERO ENGINES Revenue: $3.88 billion Profit: $378 million MTU is part of the V2500 alliance and its successor, with P&W and Rolls-Royce

-2 Alliant Techsystems Revenue: $3.61 billion Profit: $504 million For Zodiac, 787 Solid rocket propulsion, commercial and is a star signing military aerostructures, armaments Boeing

36 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

+1 +3 Israel ALCOA AEROSPACE Industries Revenue: $3.38 billion Revenue: $3.44 billion Profit: not available Profit: not available The US aluminium giant classifies aerospace as a reportable segment rather than divi- The Israeli defence manufacturer is well- sion. Alcoa believes its in-house development of innovative new alloys and construction placed to grow export sales, with a good techniques will keep aluminium competitive with carbon composites on cost, weight position in unmanned systems and performance criteria for years to come

Aluminium? Still +3 shines brightly triumph group Revenue: $3.41 billion Profit: $515 million Revenue growth of 46% leads the pack, owing to its $1.44 billion acquisition of 787 supplier Vought in June 2010

-1 Ishikawajima- Harima Revenue: $3.35 billion Profit: $69 million At 16%, the maker of CF34 and V2500 components outgrew all engine makers Boeing

-4 Eurocopter EC175 on approach to Farnborough saab Revenue: $3.19 billion Profit: $268 million Revenue grew only 3% but profit surged from gain on sales of a 3D mapping unit

-2 COBHAM Revenue: $2.86 billion Profit: $404 million Total revenue dipped, but solid growth in mission systems and aviation services

+1 Hindustan Aeronautics Revenue: $2.86 billion Profit: $618 million HAL closed year by starting construction of Rolls-Royce joint venture in Bengaluru BillyPix flightglobal.com 18-24 September 2012 | Flight International | 37 Top 100 special REPORT

+2 NEW ENTRY ELBIT SYSTEMS ITT EXELIS Revenue: $2.82 billion Revenue: $2.57 billion Profit: $116 million Profit: $235 million The Israeli defence electronics maker The communications and electronic warfare expert was the defence arm of ITT until that is seeing significant growth in areas conglomerate split itself into three separate companies in 2011. Joining the Top 100 outside the USA and Europe as an independent company for the first time, McLean, Virginia-headquartered ITT Exelis works in networked communications, sensing and surveillance, electronic warfare, air traffic solutions and information systems, and also has growing positions in cyber secu- +2 rity, composite aerostructures, navigation, logistics and technical services AVIO Revenue: $2.69 billion Profit: $267 million Cinven bought the Turin-based maker of gearbox and turbine components in 2007; an IPO plan was ditched in 2011

+3 b/E AEROSPACE Revenue: $2.45 billion Profit: $428 million The cabin and interior products maker is also a major distributor of fasteners and consumables Boeing Apache Longbow: electronic warfare, Exelis-style ITT Exelis ITT

-3 HAWKER BEECHCRAFT Revenue: $2.44 billion Loss: $482 million Hawker Beechcraft has become perhaps the highest-profile business jet casualty of the financial crisis, with an unsustain- able debt burden leading to a filing in May this year for Chapter 11 bankruptcy protection. The origins of the crisis lie in the over-optimism of the mid-2000s busi- ness jet boom. In 2007, Goldman Sachs and private equity house Onex Partners bought what was then Raytheon Aircraft from the weapons systems maker for $3.3 billion, a price that turned out to be wildly optimistic. The 2008 financial crisis has left the business jet market in tatters, and while firms such as Dassault or Gulfstream – which make large-cabin models – are seeing some recovery, Hawker Beechcraft’s small-to-midsize sector remains in depression. After three Hawker’s midsize busi- years of efforts at transforming the busi- ness jets such as the ness, there may be little scope left for 900XP have struggled cost cutting, and the company is still a for sales since the loss-maker, even without the asset write­ financial crisis broke downs that made 2011’s losses so dire Hawker Beechcraft Hawker

38 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

TOP 100 REVENUE BY REGION TOP 20 SHARE OF TOP 100 PROFIT 2011* TOP 20 SHARE OF TOP 100 SALES 2011

Europe Top 20 Top 20 North America 31.2% 76.6% 77.8% 63.1% South America 1.0%

Middle East Asia The rest The rest 1.1% 3.4% 23.4% 22.2% SOURCE: PwC SOURCE: PwC *Operating pro t SOURCE: PwC

787 full-flight simulator at CAE in Montreal Dan Thisdell/Flightglobal Dan

AVERAGE TOP 100 OPERATING MARGIN 2000-2011*

10%

8%

6%

4%

2%

Boeing Maritime 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Surveillance Aircraft SOURCE: PwC *Only includes those companies for which both aerospace revenues and aerospace pro t is available concept Boeing flightglobal.com 18-24 September 2012 | Flight International | 39 Top 100 special REPORT

-1 Kawasaki Heavy Industries Revenue: $2.35 billion Profit: $89 million The aerospace division of this Japanese industrial stalwart is a long-time key partner for Boeing, helping develop several models including the 777 and 787 and providing parts such as fuselage panels, doors and, for the 787, main landing gear and the fore section of the fuselage. Other clients include Embraer – KHI was a risk-sharing partner on the 170 and 190 regional jets. As with Mitsubishi KHI provides 787 and Fuji, Kawasaki is a favoured partner main landing gear for Boeing in technology development. For and forward fuselage all three, “heavy” is a misnomer Boeing

+1 -1 MEGGITT GKN Revenue: $2.25 billion Revenue: $2.29 billion Profit: $405 million Profit: $256 million Recent deals for the systems maker One of the UK’s industrial champions, GKN has become indispensable to Airbus as a include fire protection systems for the metal and composite wing components supplier. Rolls-Royce is another important partner A320neo – in a composite compressor blades development project. GKN will become a top-three supplier of engine components this year when its acquisition of Volvo Aero closes -1 BBA AVIATION Revenue: $2.14 billion Profit: $181 million Flight support and aftermarket services; London headquarters

+2 Teledyne Technologies Revenue: $1.94 billion Profit: $227 million First A350 wing at Electronic components and subsystems Airbus Toulouse: for all aircraft types GKN milestone Airbus

-1 +1 -2 PARKER HANNIFIN CAE RUAG Revenue: $1.92 billion Revenue: $1.77 billion Revenue: $1.72 billion Profit: $247 million Profit: $293 million Profit: $105 million Motion-and-control systems, and valves, Flight simulators and training. Next Maintenance, repair and upgrade serv- pumps and fluid handling. Contracts year’s results will show impact of debt- ices for civil, business and military include a design-and-produce deal for financed C$314 million purchase of aircraft, and assembly of the Dornier CSeries fuel and hydraulic systems Oxford Aviation Academy 228 New Generation twin turboprop

40 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

+1 NEW ENTRY ESTERLINE ATI Revenue: $1.72 billion Revenue: $1.48 billion Profit: $199 million Profit: not available Avionics, controls, sensors, advanced Pittsburgh-headquartered Allegheny materials; Bellevue, Washington head- Technologies is a specialty metals and quarters castings, forgings and machined compo- nents supplier. A highlight of 2011 was an agreement to supply Goodrich with -1 forgings for landing-gear components for commercial, regional, and business aircraft until 2015, from ATI Ladish’s ZKM EATON Forging operation in Poland. Products Revenue: $1.65 billion include jet engine parts and fasteners, as Profit: $244 million well as structural parts. In the first half Power management, fuel systems, of 2012, aerospace sales were a third of Special aircraft, hydraulics; Cleveland, Ohio headquarters ATI’s total, up 3% on full-year 2011 special metals US Army US

-3 ST ENGINEERING ORBITAL SCIENCES KONGSBERG Revenue: $1.41 billion Revenue: $1.35 billion Revenue: $1.34 billion Profit: $178 million Profit: $80 million Profit: not available For Singapore Technologies, civil aircraft Satellites, space systems and launchers, Norway’s leading defence supplier maintenance, repair and overhaul is a including Pegasus rocket, air-launched produces components for fixed-wing key business, through its ST Aero unit from Orbital’s modified L-1011 tri-jet aircraft, helicopters and spacecraft

+9 TRANSDIGM Revenue: $1.21 billion Profit: $487 million The fastest-growing company in the Top 100 also boasts a 40% operating margin – that is down from nearly 44% last time – but the components maker is still nearly twice as efficient as any other company in the league table. Chief executive Nicholas Howley says TransDigm focuses “very tightly” on proprietary aerospace products with significant aftermarket content. Most of its products are of its own design and manufacture, and sales are roughly split 50-50 between OEMs and operators. More than 90% of sales are of proprietary products for which TransDigm owns the design, and some three-quarters of sales are from products for which it is the sole source supplier. Revenue growth in recent years has been about 20% yearly, about half organic and half by acquisition. Howley, making a bold but reasonable claim, reckons TransDigm is possibly the most profitable industrial business in the country and “probably one of the biggest Never heard of companies in Cleveland that nobody ever TransDigm? How heard of” about Boeing F-18? BillyPix flightglobal.com 18-24 September 2012 | Flight International | 41 Top 100 special REPORT

ENGINES Component makers top the growth league in a sector where revenue is necessarily tied to air- craft deliveries. With its acquisition of Volvo Aero set to close this year, GKN will feature on next year’s list, comfortably within the top 10. Also in 2012 figures, profitability could take a step up- ward at GE and Rolls-Royce, as rising Boeing 787 deliveries have started to pull through increasing numbers of GEnx and Trent 1000 powerplants, although it will be 2013 before those pro- grammes really start showing bottom-line per- formance. For Rolls-Royce, another highlight of 2013 will be first flight of the Trent XWB-powered Airbus A350, a programme that will not, however, deliver much revenue until deliveries begin in earnest in 2015. Meanwhile, the defining battle is between the GE-Safran CFM International ven- ture’s Leap replacement for the venerable CFM56, and United Technologies’ Pratt & Whitney PurePower geared turbofan for domi- nance in the market for next-generation narrow- bodies. Both engines have racked up impressive orderbooks, but the market will be scrutinising every scrap of available data during the next cou- ple years as CFM and P&W push for certification. Rolls-Royce Rolls-Royce lift system for Lockheed Martin F-35

Engine and components sales 2011 Engines and components sales Growth

$ million 2011 v 2010 1 General Electric 18,859 1 IHI 16.6% 2 United Technologies 13,430 2 MTU 13.2% 3 Rolls-Royce 12,056 3 Avio 13.2% 4 Safran 8,094 4 Rolls-Royce 9.8% 5 Honeywell 5,738 5 Honeywell 7.4% 6 MTU 3,884 6 General Electric 7.0% 7 IHI 3,351 7 Safran 3.9% 8 Avio 2,239 8 United Technologies 3.8% 9 Volvo 903 9 ITP 2.3% 10 ITP 688 10 Volvo -10.4% Pratt & Whitney & Pratt Pratt & Whitney GTF; check it out Source: PwC Source: PwC

ENGINES AND COMPONENTS SALES GROWTH 2005-2011

General Electric Rolls-Royce Honeywell IHI Volvo 50% United Technologies Safran MTU Avio ITP 40%

30%

20%

10%

0%

-10%

-20% 2005 2006 2007 2008 2009 2010 2011

SOURCE: PwC

42 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

-1 KOREA AEROSPACE INDUSTRIES Revenue: $1.16 billion Profit: $96 million Korea’s national champion co-developed the F-16-derived T-50 Golden Eagle trainer and attack variant with Lockheed Martin, but an attempt to consolidate a diversi- fied shareholding structure to streamline decision-making has so far failed. Six of KAI’s shareholders hoped to sell a combined 41.75% stake in the company, 11.4% of which comes from state-owned Korea Finance Corporation, but Korean Korea Aerospace law demands at least two bidders, and hopes to ride on the only airline Korean Air had come forward T-50 Golden Eagle by an August 2012 deadline Korean Aerospace Industries Aerospace Korean

+2 moog Revenue: $1.21 billion Profit: $133 million The motion-control specialist boosted its spacecraft capability with a $46 million buyout of American Pacific in July 2012

+4 CHEMRING Revenue: $1.15 billion Profit: $165 million The UK maker of pyrotechnic devices saw its shares soar in August on interest from private equity investor Carlyle

-4 PANASONIC Revenue: $1.14 billion Profit: not available Panasonic’s California operation is a leader in the growing market for in-flight entertainment and communication

-3 ULTRA ELECTRONICS Revenue: $1.13 billion Profit: $189 million Ultra provides a huge range of electronic EADS, Finmeccanica and systems, including leading edge ice BAE Systems all have a protection for the Boeing 787 stake in Eurofighter BillyPix

flightglobal.com 18-24 September 2012 | Flight International | 43 Top 100 special REPORT

-1 -3 HEXCEL Fuji Heavy Industries Revenue: $1.13 billion Revenue: $914 million Profit: not available Profit: $33 million The Cambridge, UK-based composite Fuji is another example of the Japan-US alliance fostering strong industrial ties. materials specialist is supplying all Boeing’s 767, 777 and 787 all feature significant content from Fuji, which also makes prepregs and fibres for the Airbus A350 the AH-64D helicopter under licence from Boeing and the Bell/Fuji UH-1J helicopter. The company is best known for its Subaru autos brand -8 Loral Space & Communications Revenue: $1.11 billion Profit: $93 million Satellite communications hardware and services provider; New York headquarters

+6 DIEHL AEROSYSTEMS Revenue: $935 million Profit: not available Cabin interiors and avionics solutions unit of Diehl Group; Laupheim, Germany Fuji makes versions of the Apache under licence from Boeing Boeing

-8 -2 VOLVO AERO GENCORP Revenue: $903 million Revenue: $910 million Profit: $47 million Profit: $75 million The aircraft and spacecraft engines division of Volvo Group is making its last appear- GenCorp’s Aerojet unit specialises in ance in the Top 100 following its £633 million ($987 million) acquisition by GKN, agreed missile propulsion – and helped land on the eve of this year’s Farnborough air show. The deal will turn GKN’s relatively small NASA’s Curiosity rover on Mars engine components business into what it believes will be the third-largest in the world, with annual turnover of £800-900 million – behind MTU (26th) and Avio (37th) -1 STORK Revenue: $907 million Profit: not available The Fokker Services unit supports legacy Fokker jets and Fokker Technologies is a major structures maker

Woodward Governor Revenue: $843 million Volvo turbine Profit: $130 million expertise keeps Actuation and flight control systems Viking rocket for military and commercial fixed-wing engines firing aircraft; Fort Collins, Colorado Volvo Aero Volvo

44 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

-3 -3 +3 INDRA AMPHENOL HEICO Revenue: $827 million Revenue: $788 million Revenue: $765 million Profit: not available Profit: not available Profit: $138 million Air transport management, surveillance Interconnect systems for harsh environ- Parts for avionics systems, aerostruc- and avionics systems; Madrid ments; Whitstable, UK headquarters tures, landing gear, engines; Florida

-1 BALL Revenue: $785 million Ball optics: the Profit: $80 million guts of NASA’s Ball technologies range from antenna James Webb and attitude sensors to beam-steering space telescope mirrors, star trackers and cryogenic cooling systems for aircraft and space- craft. The company was recently chosen by NASA to demonstrate a “green” replacement for efficient, but highly toxic, rocket propellant hydrazine. Lockheed Martin also chose Ball to design, develop and manufacture the communications, navigation and identification inte- grated body antenna suite for the F-35. Headquartered in Boulder, Colorado Ball Aerospace Ball

ATR 500MP in service -1 with Italy’s customs force. EADS and Finmeccanica build the aircraft jointly PILATUS Revenue: $749 million Profit: $104 million Delivery of a $523 million deal for 75 PC-7 MkII basic trainers to India begins in the fourth quarter of 2012

-1 AEROFLEX Revenue: $729 million Loss: $35 million Losses have continued for the microelec- tronic components maker, with an oper- ating loss of $21 million in its fiscal year 2012 to end-June. Plainview, New York

+1 LATECOERE Revenue: $690 million Profit: $59 million The French aerostructures and wiring supplier to Airbus, Boeing and Dassault was linked to partnership talks in 2011 Dan Thisdell/Flightglobal Dan flightglobal.com 18-24 September 2012 | Flight International | 45 Top 100 special REPORT

CIVIL Commercial aircraft revenue 2011 Commercial aircraft revenue growth

While Boeing retains number-one ranking in $ million 2010 v 2011 the Top 100, arch-rival Airbus still holds the 1 Airbus* 41,277 1 Embraer 19.7% bragging rights in airliners – although 2012 may see the Americans close the gap as 787 2 Boeing 36,171 2 Cessna 16.7% deliveries build. In business jets, Dassault 3 Bombardier 8,594 3 Boeing 13.6% ** ** Falcon’s plunge and Gulfstream’s rise tell a 4 Gulfstream 5,998 4 Gulfstream 13.2% story; both play in the large-cabin segment, 5 Embraer 4,828 5 Airbus* 7.3% which has weathered the financial storm 6 Dassault Aviation*** 3,199 6 Bombardier -2.4% well, but market-maker NetJets (active fleet: 7 Cessna 2,990 7 ATR**** -3.7% 540 aircraft) has been ordering Gulfstreams 8 Hawker Beechcraft 2,435 8 Hawker Beechcraft -13.2% and shunning Falcons. With Gulfstream’s 9 ATR**** 1,300 9 Dassault Aviation*** -28.7% ultra-long-range G650 set to enter service NOTES: *Excluding ATR **Part of General Dynamics ***Falcon NOTES: *Excluding ATR **Part of General Dynamics ***Falcon imminently, some experts think it is time division ****EADS-Finmeccanica joint venture; sales figure from division ****EADS-Finmeccanica joint venture; sales figure from company press release. SOURCE: PwC company press release. SOURCE: PwC Dassault reached beyond its 7X flagship.

Farnborough 2012: the balance is shifting to civil among Top 100 manufacturers Dan Thisdell/Flightglobal Dan Air France A320, Charles de Gaulle

AIRLINERS 2005-2011

Revenue growth 30% Boeing Airbus 25%

20%

15%

10%

5%

0%

-5%

-10%

-15%

-20% 2005 2006 2007 2008 2009 2010 2011 SOURCE: PwC BillyPix

BUSINESS AIRCRAFT 2005-2011 REGIONAL AIRCRAFT 2005-2011

Revenue growth Revenue growth 50% 50% Dassault Gulfstream Cessna Hawker Bombardier 40% 40% ATR Embraer 30% 30% 20% 20% 10% 10% 0% 0 -10%

-20% -10%

-30% -20%

-40% -30%

-50% -40% 2005 2006 2007 2008 2009 2010 2011 2005 2006 2007 2008 2009 2010 2011 SOURCE: PwC SOURCE: PwC

46 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

-2 +1 ITP CRANE Revenue: $688 million Revenue: $678 million Profit: not available Profit: $146 million The Spanish engine components maker, is enjoying its position on the Rolls-Royce Trent Systems and components for commer- 1000 now Boeing’s 787 is in service. It is also a supplier to the Rolls-Royce Trent XWB, cial and military engines, landing gear which will power Airbus’s A350 and other applications

+4 AERNNOVA Revenue: $631 million Profit: not available Concept, design and manufacture of aerostructures and composite and metallic components; Vitoria, Spain

FIRTH RIXON Revenue: $621 million Profit: not available Soon enough, they Seamless rolled rings and forgings for can ride on one engines and other extreme applications Airbus

Eurocopter EC135 Eurocopter flightglobal.com 18-24 September 2012 | Flight International | 47 Top 100 special REPORT

+1 -12 CURTISS-WRIGHT FLIR SYSTEMS Revenue: $616 million Revenue: $578 million Profit: not available Profit: $209 million Motion and flow control, metal treat- The Portland, Oregon-based optical systems maker is another star performer, with a ment; Parsippany, New Jersey 36% operating margin. Its 14% year-on-year decrease in revenue also left it in fourth place on that scale, although sales are volatile with significant government business -4 A FLIR view of the MAGELLAN flight display at AEROSPACE Farnborough 2012 Revenue: $592 million Profit: $51 million Aero and rocket engine and structural components; rising sales to single-aisle airliner programmes featured in 2011

-2 SENIOR Revenue: $591 million Profit: $92 million Metal and composite aerostructures; engine components including seals and casings; fluid systems; London-listed IR Systems F L IR

JAMCO LISI SKF Revenue: $567 million Revenue: $540 million Revenue: $459 million Profit: $12 million Profit: $66 million Profit: not available Interiors engineering and modifications, Fasteners and assembly components. Bearings, seals, rods, struts, elasto- metal components; Japan headquarters Claims to be world’s third-largest; Paris meric devices and fly-by-wire equipment

KAMAN Revenue: $547 million Profit: $80 million The maker of the legendary SH-2 Super Seasprite, H-43 Husky and K-Max heli- copters looked to be out of the rotorcraft business until the US Navy and Marines selected an unmanned K-Max, co-devel- oped with Lockheed Martin, for Afghanistan cargo deliveries. Aerostructures and composites work also figures heavily, with defence sales making up a short two-thirds of 2011 revenue. Late 2011 brought the acquisition of Vermont Composites, with positions in the intelligence-surveillance- K-Max unmanned reconnaissance market and on the V-22 features distinctive Osprey and P-8 Poseidon intermeshed blades ockheed MartinL ockheed

48 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

-69 ITT Revenue: $339 million ITT provides the Profit: not available sonobuoy launcher The one-time conglomerate shrank dramati- for Boeing’s P-8A cally in 2011 with the spin-offs of its water business and defence operation, which now trades as ITT Exelis (ranked 38). ITT Corporation’s own aerospace business segment now focuses on fluid control devices, electromechanical actuators, switches, connections and vibration absorp- tion for both civil and military programmes. Products such as seat-positioning controls for business and first-class cabins are an ITT speciality, as are weapon shock manage- ment systems, missile control dampers and plasma shape-cutting products Boeing

+1 NEW ENTRY HEROUX-DEVTEK MARSHALL AEROSPACE Revenue: $336 million Revenue: $326 million Profit: $31 million Loss: $6 million Its focus will be on landing gear after the The family-owned business, based in Cambridge since 1937, specialises in the conver- disposal of aerostructures unit to Precision sion, modification, maintenance and support of military, civil and business aircraft, and Castparts (ranked 23) closes in 2013 is investing heavily to help turn Cambridge airport into a major business aviation hub

+2 ASCO Revenue: $321 million Profit: $9 million High-lift structures, mechanical assem- blies, functional components; Belgium

-4 DUCOMMUN Revenue: $293 million Profit: $26 million The Los Angeles components maker should leap up the table next year on its Coup for Marshall: C-130J acquisition of electronics-maker LaBarge wingbox ­refurbishment contract USAF

+4 +2 -3 SONACA GARMIN DENEL Revenue: $290 million Revenue: $285 million Revenue: $275 million Profit: $16 million Profit: $72 million Loss: $58 million Aerostructures and subsystems, with Avionics systems, with a leading posi- The largest defence manufacturer in products on every Airbus including the tion in synthetic vision and touchscreen South Africa is wholly-owned by the A400M military transport; Belgium controllers, especially on small aircraft government

flightglobal.com 18-24 September 2012 | Flight International | 49 Top 100 special REPORT

-1 -3 MARTIN-BAKER DONCASTERS Revenue: $273 million Revenue: $263 million Profit: $56 million Profit: not available The company traces its origins to 1934, but it was the 1942 death of co-founder Forged, machined and superalloy compo- Valentine Baker during a test flight of the Martin-Baker MB3 prototype that led James nents and assemblies; Staffordshire, UK Martin to develop the first ejection seat. With 7,400 lives saved in 60 years – most recently in a 15 August ejection from a Pakistani Mirage III – Martin Baker is now responsible for the Lockheed Martin F-35’s fully integrated escape system

Joint Strike Fighter features a Martin TERMA Baker fully integrated Revenue: $238 million escape system Profit: $19 million Electronic warfare and alternate mission equipment structures, including a multi- mission pod for the F-35; Denmark

+1 CIRCOR INTERNATIONAL Revenue: $137 million Profit: $13 million Valves, motors, actuators and landing- gear products, including for the Boeing CH-47 Chinook; Corona, California

-17 UMECO Revenue: $126 million Profit: not available The composite materials supplier makes its last Top 100 appearance as an inde- pendent after Cytec buyout in July 2012 ockheed MartinL ockheed

EADS-Finmeccanica joint venture ATR is enjoying a bright turboprop market EADS

50 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT

DEFENCE AEROSPACE SALES GROWTH 2005-2011

Lockheed Martin Northrop Grumman Raytheon EADS United Technologies 50 Boeing BAE Systems Finmeccanica Thales L-3 40 30 20 10 0 -10 -20 -30 -40 -50 -60 2005 2006 2007 2008 2009 2010 2011

SOURCE: PwC

DEFENCE Defence aerospace revenue growth Defence aerospace sales 2011 Although the big US military budget crunch is still to come, cuts started to kick in during 2011, es- 2010 v 2011 $ million pecially in the UK. Another factor holding revenue 1 United Technologies 9.9% 1 Lockheed Martin 38,365 growth down last year was the beginning of the 2 Israel Aerospace Industries 9.1% 2 Boeing 27,180 run-down in Afghanistan – indeed, as the chart 3 Textron 4.8% 3 Northrop Grumman 26,412 above suggests, spending on that conflict in the 4 Lockheed Martin 2.5% 4 Raytheon 19,602 mid-2000s drove much revenue growth, espe- 5 Boeing 0.1% 5 EADS 14,591 cially as US and allied forces ramped up deploy- 6 L-3 -2.2% 6 Finmeccanica 13,152 ment of unmanned aerial systems. Now, though, 7 Honeywell -3.3% 7 United Technologies 10,804 with the military spending debate apparently 8 Raytheon -3.7% 8 L-3 10,724 deadlocked in Washington, defence companies 9 EADS -4.9% 9 Thales 9,608 are reporting little or no forecast visibility but are 10 Northrop Grumman -6.2% 10 BAE Systems 8,923 preparing for cutbacks that may go far beyond a mere post-war spending hiatus. For BAE Systems 11 Thales -8.0% 11 Honeywell 5,164 and Finmeccanica, then, these are challenging 12 BAE Systems -9.9% 12 Textron 4,171 times; after spending heavily during the 2000s 13 Finmeccanica -15.2% 13 Israel Aircraft Industries 3,436 to gain access to the lucrative US market, growth 14 Dassault Aviation -82.5% 14 Dassault Aviation 233 may prove elusive. SOURCE: PwC SOURCE: PwC Rex Features Rex Photo NavAir Dassault Rafale: India deal is first export win Missile defence from Raytheon flightglobal.com 18-24 September 2012 | Flight International | 51 Top 100 special REPORT

Top 100 by company name

Company Company ranking Company Company ranking Company Company ranking 2011 2010 2011 2010 2011 2010 Aernnova 78 82 Fuji Heavy Industries 64 61 Moog 56 58 Aeroflex 74 73 Garmin 94 96 MTU Aero Engines 26 27 Alcoa 31 34 GenCorp 65 63 Northrop Grumman 6 5 Alliant Techsystems 28 26 General Dynamics 4 4 Orbital Sciences 53 53 Amphenol 70 67 General Electric 9 10 Panasonic 59 55 Asco 91 93 GKN 42 41 Parker Hannifin 46 45 ATI 51 new Goodrich 18 18 Pilatus 73 72 Avio 37 39 Harris 25 23 Precision Castparts 23 28 B/E Aerospace 39 42 Hawker Beechcraft 40 37 Raytheon 7 7 BAE Systems 15 8 Heico 72 75 Rockwell Collins 22 24 Ball 71 70 Heroux Devtek 89 90 Rolls-Royce 12 14 BBA Group 44 43 Hexcel 61 60 RUAG 48 46 Boeing 1 1 Hindustan Aeronautics 35 36 Saab 33 29 Bombardier 16 16 Honeywell International 14 15 Safran 10 13 CAE 47 48 Indra 69 66 Senior 82 80 Ishikawajima-Harima 32 31 Singapore Technologies Chemring 58 62 52 52 Circor International 99 100 Israel Aerospace Industries 29 30 Engineering Cobham 34 32 ITP 76 74 SKF 87 87 Crane 77 78 ITT Corporation 88 19 Sonaca 93 97 Curtiss-Wright 80 81 JAMCO 84 84 Spirit AeroSystems 21 25 Dassault Aviation 24 20 Kaman 85 85 Stork 66 65 Denel 95 92 Kawasaki Heavy Industries 41 40 Teledyne Technologies 45 47 Diehl Aerosystems 63 69 Kongsberg 54 51 Terma 98 98 Doncasters 97 94 Korea Aerospace Industries 57 56 Textron 17 17 Ducommun 92 88 L-3 Communications 13 11 Thales 11 12 EADS 2 2 Latecoere 75 76 TransDigm Group 55 64 Eaton 50 49 LISI 86 86 Triumph Group 30 33 Elbit Systems 36 38 Lockheed Martin 3 3 Ultra Electronics 60 57 Embraer 19 22 Loral Space & Communications 62 54 Umeco 100 83 United Technologies Esterline 49 50 Magellan Aerospace 81 77 5 6 Corporation Exelis 38 new Marshalls 90 new Volvo 67 59 Finmeccanica 8 9 Martin-Baker 96 95 Woodward Governor 68 68 Firth Rixson 79 79 Meggitt 43 44 Zodiac 27 35 FLIR Systems 83 71 Mitsubishi Heavy Industries 20 21 Source: PwC

DATA SOURCE

The Flight International Top 100 was concerned with aerospace. Groups have tures have been included in the finan- tion, independent of production or compiled by aerospace experts at been ranked by aerospace sales in cials. Intersegment sales have been operating territories. Pricewaterhouse Coopers LLP (PwC). 2011, calculated from divisions that excluded from operating results and ■ Operating Results The information used to prepare this operate primarily in the industry. Sectors profits for divisions where possible, but Results are generally taken as profit report has been obtained solely from involved with aircraft, engines, avionics, when not possible, each divisional result (or loss) before interest, tax and excep- company annual reports, public filings missiles, space and aerostructures are has been presented inclusive of inter tional items and after deduction of and other publicly available information. largely straightforward, but telecommuni- division sales, resulting in aerospace depreciation. The measure gives a PwC has not sought to establish the cations, network centric and C4I sys- revenues greater than group sales. generally accepted guide to a busi- reliability of this information and has not tems and some overhaul operations are ■ Exchange Rates ness’s operational performance. verified such information. Accordingly, included only where these are largely An average exchange rate for the period Discontinued or discontinuing opera- no representation or warranty (whether concerned with aerospace . Satellite 1 January 2011 to 31 December 2011 tions are included where they fall in express or implied) is given by PwC as services have been excluded where has been used for all non-US compa- fiscal year 2011 for that business. to the accuracy of this information. possible, as have companies and divi- nies, regardless of fiscal year definitions. ■ ROCE ■ Company/Divisions sions that derive more than 50% of their The percentage changes in financial Return on Capital Employed is calcu- The top line of the financial figures refers revenues from services such as leasing. figures are given in local currency terms lated as earnings before interest ex- to consolidated results for the overall Where acquisitions were made within to avoid unnecessary distortions. pense, taxes, unusual items and group, including non-aerospace busi- the accounting period, pro-forma ac- ■ Country minority interests divided by year-end nesses. The divisional figures are for counts have been used for the 12-month All companies have been listed by total assets less year-end non-interest- those businesses that are fully or largely consolidated performance. Joint ven- country of headquarters or incorpora- bearing current liabilities.

52 | Flight International | 18-24 September 2012 flightglobal.com TOP 100 special REPORT Airbus

Getting it out the door is just part of the challenge COMMENTARY PWC NEIL HAMPSON supply chain under pressure from price, risk and expansion

Programme management is this convergence of pressures? In emphasised the importance of be- following things that companies moving well beyond its traditional the past, companies would respond ing able to deliver programmes in a need to make sure they get right: heartland of scheduling, progress to pressure by majoring on excel- way that is much more strongly inte- ■ Stay focused on your core: Identify tracking, managing risk and pres- lence in one of solutions leader- grated into the customer, market and understand what you do best surising suppliers. Aerospace ex- ship, operational excellence or and supply chain forces that are and make sure focus guides your ecutives interviewed for PwC’s customer intimacy. But today’s envi- shaping the sector. key decisions. You must know what report A&D Insights: Programmes ronment means excellence in one The downturn in western de- you do well, focus on that, and Under Pressure* agree. Aerospace alone is not enough. Companies, fence markets and the continued measure performance. and defence companies face a new and in turn their programme man- internationalisation of the defence ■ Put an emphasis on co-creation intensity in the delivery of their pro- agers, need to be top of their game and commercial sectors have ac- and customer intimacy: Develop grammes – the need to be faster, in all three – and they need to be relations with your customers and fitter and lower-cost while managing able to deliver innovation and af- Customers expect suppliers that are really tight, so the growing programme complexity fordability in tandem. innovation to that requirements are exactly un- which goes with the territory. We invited the senior executives derstood, developed together and These are considerable chal- we interviewed to identify the pro- continue while costs put at the heart of programme de- lenges in their own right, but have gramme-management attributes fall or are capped sign and execution. been given a new intensity by the they feel are most important in the ■ Get innovation and cost control unprecedented environment in current and future environment. working in tandem: The previous which today’s programmes are be- They painted a picture of a different celerated the trend to greater glo- ability of customers to tolerate price ing delivered. A&D companies are kind of programme-management balisation of supply chains. But as drift no longer exists. Companies experiencing more pressure from mindset, in which partnership, inter- supply chains extend, so too does will need to deliver more capability more directions than ever before nationalism, inclusivity and innova- risk. More inclusive relationships at lower cost, becoming adept at — on price, supply chain risk, the tion are as much to the fore as across and down the supply chain combining cost reduction strategies need to expand globally, the risks really good “get it out of the door” can help manage these risks and with “innovation-ready” derivative associated therewith and broader programme management. ensure they are jointly identified platforms. ■ macro-economic uncertainty. For example, 64% of the senior and mitigated rather than debated *For more information on the re- Alongside this, customers expect executives we interviewed stressed and litigated. Such an intense and port, email Neil Hampson, global that innovation will continue while the importance of innovation as a complex environment brings dan- aerospace and defence leader, at costs come down or are capped. source of competitive advantage gers. How can companies cut [email protected] Innovation is a must-have but can when asked to identify the most through this? Our discussions with no longer come at any price. important aspects of their pro- senior executives, and our review of Read the full report at How can companies respond to gramme delivery strategy. They also what they said, led us to identify the flightglobal.com/PwCa&D

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